Spain’s Housing Market May Need Four More Years To Rebalance
Interesting study Sandar and Poor’s on the future of real estate in Spain. This document shows the one hand the evolution of real estate since 2000 and the imbalances that currently causes excess housing built.
The first consequence is the singer falling home prices caused by excess of existing supply. This fall since 2008 to date is 25% of the value and still continue to fall until the Spanish market can absorb the excess of 800,000 homes there right now.
It should be remembered that this housing glut comes not only from the purchase by the Spanish, but also involved the growing number of immigrants settled in Spain and another factor that does not speak the study, which was the purchase of homes by Europeans in Spain as an investment (mainly Germans).
According to S & P at the moment there is a demand in Spain than 300,000 new homes a year, on the other hand are built each year about 70,000 homes, these figures are what allow to keep S & P it would take at least four years for the housing needs absorb both new construction, as the stock of the real estate boom years.
The study also provides mortgage lending and families has been declining in recent years and consequently a weakening of the financial sector.
This report also touches on the delicate economic families pressed on one side by rising unemployment and the other for variable rate interest that make them very sensitive to changes in the Euribor.
As I am not ta agree on is the optimistic view of S & P on the growth of Spain. S & P maintains that Jan 2012 there will be a contraction of -1.5% in 2013 and only -0.5%. I think these figures are much higher due to lack of liquidity of Spain, the high interest rates to be paid your debt, lack of investment in the productive result of the strangulation of credit, etc..
My personal view is that this figure of at least five years should be increased by twice as a result of further falling demand following the economic crisis and its next extension.